Does crude oil output aid economy boom or curse in Nigeria? An inference from “Dutch disease”

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Samuel Oludimu ◽  
Adewale Andrew Alola
Keyword(s):  
Economic Growth ◽  
Crude Oil ◽  
Resource Curse ◽  
Oil Production ◽  
Income Level ◽  
Dutch Disease ◽  
Least Square ◽  
Content Type ◽  
Crude Oil Production ◽  
The Impact

PurposeA reflection on some supposed oil exporting states constantly reminds of the (in) validity of the resource curse hypothesis and environmental consequences of oil exploration. In Africa, especially the case of Nigeria, the argument has remained whether the country's voluminous deposit of crude oil has positively affected the livelihood of the people. The study aims to examine the impact of oil production on the income level in Nigeria.Design/methodology/approachIn this context, the study first examined validity of Dutch disease in Nigeria, thus providing a foundation to further establish the resource curse hypothesis. As such, the impact of crude oil production (CRUDE), square of crude oil production (CRUDESQ), crude oil reserves (RESERVES) and population (POP) on economic growth over the period of 1980–2018 is examined through the combination of autoregressive distributed lag (ARDL), fully-modified ordinary least square (FMOLS) and canonical cointegration regression (CCR) methods.FindingsWhile the study revealed the existence of Dutch disease in Nigeria, the resource curse hypothesis is also valid. However, the study found that the resource curse hypothesis in Nigeria can be over-turned when the CRUDE attains a certain maximum threshold, i.e. when crude oil output is doubled over time. In addition, either of crude RESERVES or oil rent (RENT) is seen as a limiting factor to economic growth while POP poses a positive and desirable impact on the country's economic development.Originality/valueThus, the implication of a U-shaped relationship between oil production and income level is that Nigeria's natural resources exploration could be employed to over-turn the potential of resource curse hypothesis by increasing exploration while the sources of leakages and misappropriation of the oil revenues are deliberately mitigated. Other useful socio-economic policies were proposed for the Government.

scholarly journals Reduction of Crude Oil Production Cost in Nigerian Indigenous Company using Activity Based Costing

2019 ◽  
Vol 4 (1) ◽  
pp. 49-53 ◽  
Author(s):  
Segun Adebisi Osetoba ◽  
Nkoi Barinyima ◽  
Rex Amadi
Keyword(s):  
Crude Oil ◽  
Cost Reduction ◽  
Production Cost ◽  
Value Added ◽  
Oil Production ◽  
Activity Based Costing ◽  
Service Company ◽  
Crude Oil Production ◽  
The Cost ◽  
The Impact

The aim of this study is to investigate the impact of activity based costing in reducing crude oil production cost in Nigerian indigenous oil and gas company. This research work identified strategies to effectively reduce the cost of crude oil production by adopting a cost reduction tool for crude oil production and to establish a good crude oil flow to the surface for production. Activity based costing was the cost reduction tool used for this work. The tool helps to differentiate between value added costing and non-value added costing. Non-value added costs must be reduced or eliminated during production so as to maximise profit. Data was collected from an indigenous oil service company. The collated data were tabulated and graphs were plotted with the aid of Microsoft excel. The analysis revealed a total sum of ₦ 416,978,977 was wrongly spent for a duration of three years on crude oil production due to non-value added costing. The activities are: poor transportation of crude oil, that is, use of mobile tanker for haulage instead of laying 4 inches coated pipes for a distance of 5km and contracting the treatment of produced water to a contractor instead of setting up a water treatment plant. Also, using a diesel engine generator for electric power supply while gas was available as a fuel gas for natural gas consuming generator was a non-value added activity. Lastly, inadequate oil well flowing practice by flowing the well through an adjustable choke for a long period of time instead of using a fixed choke. This is a huge loss for indigenous oil producing fields operated by an indigenous oil service company in Nigeria. The loss was due to inability of the producers/field location owners to set up few equipment to meet up with complete operation standard.

External interference raises risk of Libya escalation

2017 ◽  
Keyword(s):  
Crude Oil ◽  
Oil Production ◽  
External Support ◽  
Islamic State ◽  
External Interference ◽  
Content Type ◽  
Crude Oil Production

Significance The report outlines that the UAE expanded Haftar's airpower significantly. Egypt has also been a staunch supporter: in late May it carried out airstrikes against positions held by the LNA's enemies. External support for Haftar has bolstered his position and arguably eroded chances for dialogue. Impacts A siege situation could emerge around cities like Misrata. Extremist jihadis, such as al-Qaida and Islamic State (IS), could take advantage of new fighting to stage a comeback. The country's crude oil production will be volatile, especially if violence disrupts oil production in western Libya.

Oman will innovate to meet growing energy needs

2017 ◽  
Keyword(s):  
Crude Oil ◽  
Oil And Gas ◽  
Oil Production ◽  
Economic Cooperation ◽  
Content Type ◽  
Energy Needs ◽  
Crude Oil Production ◽  
Fiscal Revenue ◽  
Energy Innovation ◽  
The Government

Significance The government signed up to agreements by OPEC and non-OPEC states in December 2016 to cut oil production for six months in an attempt to boost prices. The move demonstrated a desire to show solidarity, even though it pushed Oman below its recently achieved crude oil production record of 1 million barrels per day (b/d), reducing fiscal revenue. Impacts Positive Omani gas cooperation with Iran might tempt other Gulf Arab states, such as Qatar and Kuwait, to follow suit. Any deeper economic cooperation with Tehran would strain Muscat-Riyadh relations, already tense because of differences over Yemen. If new oil and gas exploitation methods succeed, Oman could become a regional leader in energy innovation. The country is poorly prepared for its upcoming post-oil transition, which will hit the rentier economy.

The impact of infrastructure investment and development on economic growth on BRICS

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rohit Apurv ◽  
Shigufta Hena Uzma
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Panel Data ◽  
Least Square ◽  
Infrastructure Investment ◽  
Content Type ◽  
Brics Countries ◽  
Effect Model ◽  
Telecommunication Infrastructure ◽  
The Impact

Purpose The purpose of the paper is to examine the impact of infrastructure investment and development on economic growth in Brazil, Russia, India, China and South Africa (BRICS) countries. The effect is examined for each country separately and also collectively by combining each country. Design/methodology/approach Ordinary least square regression method is applied to examine the effects of infrastructure investment and development on economic growth for each country. Panel data techniques such as panel least square method, panel least square fixed-effect model and panel least square random effect model are used to examine the collective impact by combining all countries in BRICS. The dynamic panel model is also incorporated for analysis in the study. Findings The results of the study are mixed. The association between infrastructure investment and development and economic growth for countries within BRICS is not robust. There is an insignificant relationship between infrastructure investment and development and economic growth in Brazil and South Africa. Energy and transportation infrastructure investment and development lead to economic growth in Russia. Telecommunication infrastructure investment and development and economic growth have a negative relationship in India, whereas there is a negative association between transport infrastructure investment and development and economic growth in China. Panel data results conclude that energy infrastructure investment and development lead to economic growth, whereas telecommunication infrastructure investment and development are significant and negatively linked with economic growth. Originality/value The study is novel as time series analysis and panel data analysis are used, taking the time span for 38 years (1980–2017) to investigate the influence of infrastructure investment and development on economic growth in BRICS Countries. Time-series regression analysis is used to test the impact for individual countries separately, whereas panel data regression analysis is used to examine the impact collectively for all countries in BRICS.

Oil refining and delivery in the Western European region

2019 ◽  
Vol 13 (2) ◽  
pp. 467-482 ◽  
Author(s):  
Vladimir Pavlovich Klepikov ◽  
Vladimir Vladimirovich Klepikov
Keyword(s):  
Crude Oil ◽  
Oil Production ◽  
Transportation Systems ◽  
Oil Refining ◽  
European Region ◽  
Content Type ◽  
Oil Supply ◽  
Oil Transportation ◽  
Crude Oil Production ◽  
Western European

Purpose This paper aims to analyse the key trends in oil delivery and production and evaluate the capacities of crude oil transportation systems in the Western European region. Design/methodology/approach To meet these goals, qualitative data analysis was used to assess the contribution of countries in the region to the total crude oil production and delivery, the changes in concentration of crude oil deliveries and refineries’ capacities, the capabilities of the regional crude oil transportation system and the trends in crude oil supplies and processing from 2005 to 2015. Findings The study established that from 2013 to 2015 oil supply to the region’s refineries increased and generated additional stress on the transportation and refining infrastructure. Research limitations/implications This study examined the aggregate values of crude oil production, crude oil deliveries and refining capacities. In practice, different refineries are set to process certain types of crude oil. It is possible to use the described approach with a certain crude oil grade. Practical implications When developing the programmes for crude oil supply to refineries, it is vital to take into account the capacities of refineries and the capabilities of the crude oil transportation systems. Originality/value The study suggests that the region’s infrastructure has the necessary reserves to operate for the next few years without additional investments.

Diagnosing the curse of natural resources in Kuwait

2018 ◽  
Vol 34 (2) ◽  
pp. 153-171
Author(s):  
Nayef Al-Shammari ◽  
Noura Al-Hossayan ◽  
Mariam Behbehani
Keyword(s):  
Exchange Rate ◽  
Natural Resource ◽  
Inflation Rate ◽  
Resource Curse ◽  
Dutch Disease ◽  
Real Effective Exchange Rate ◽  
Content Type ◽  
Effective Exchange ◽  
Effective Exchange Rate ◽  
The Impact

Purpose The purpose of this paper is to empirically examine the phenomenon of natural resource curse in an oil abundant economy of Kuwait. The study estimates a behavioral equilibrium exchange rate model for Kuwait during the period 1980-2014 to assess the impact of prices and productivity factors on real effective exchange rate. Design/methodology/approach It uses time series econometric techniques, such as unit root tests, Johansen cointegration test, Vector Error Correction Model, and Impulse Response Function, to estimate the model. Findings Unlike the results of the few other studies, the empirical results show a significant impact of the variables, such as balance of trade, economic growth, oil exports, interest rate, and inflation rate, on real effective exchange rate appreciation which indicates the existence of Dutch disease within the Kuwaiti economy. Similarly, the comparative analysis between changes in public expenditure and inflation rate shows the existence of Dutch disease in Kuwait during specific periods of time. Originality/value Natural resource curse or Dutch disease is a widely recognized phenomenon affecting the balance of economic activities in natural resource abundant countries. Symptoms of Dutch disease are perceived in several changes in the economy, particularly on price level, sectorial productivity, employment, and aggregate demand which in the long run worsen the country’s economic position and lower its international competitiveness. Dutch disease is not only a feature of natural resource abundant economies, but also can affect any economy with excessive revenue generating sector or high capital inflows which appreciates country’s exchange rate. However, the examination of Dutch disease in the economy is more important when investigating the impact on oil-producing countries (Apergis et al. 2014; Mohammadi and Jahan-Parvar, 2012; Jahan-Parvar and Mohammadi, 2011). Therefore, scholars studying Dutch disease phenomenon pay greater attention to cases of Dutch disease among oil-producing countries (i.e. Arezki and Ismail, 2013; Van der Ploeg and Venables, 2013; Jahan-Parvar, 2012; Cologni and Manera, 2013).

scholarly journals CO-INTEGRATION AND CAUSALITY RELATIONSHIP BETWEEN ENERGY CONSUMPTION AND ECONOMIC GROWTH: FURTHER EMPIRICAL EVIDENCE FOR NIGERIA

2010 ◽  
Vol 11 (1) ◽  
pp. 97-111
Author(s):  
Clement A. U. Ighodaro
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Crude Oil ◽  
Electricity Consumption ◽  
Oil Production ◽  
Conservation Policy ◽  
Oil Consumption ◽  
Gas Utilization ◽  
Crude Oil Production ◽  
Causality Relationship

The Paper re - examined co‐integration and causality relationship between energy consumption and economic growth for Nigeria using data covering the period 1970 to 2005. Unlike previous related study for Nigeria, different proxies of energy consumption (electricity demand, domestic crude oil consumption and gas utilization) were used for the estimation. It also included government activities proxied by health expenditure and monetary policy proxied by broad money supply though; emphasis was on energy consumption. Using the Johansen co‐integration technique, it was found that there existed a long run relationship among the series. It was also found that all the variables used for the study were I(1). Furthermore, unidirectional causality was established between electricity consumption and economic growth, domestic crude oil production and economic growth as well as between gas utilization and economic growth in Nigeria. While causality runs from electricity consumption to economic growth as well as from gas utilization to economic growth, it was found that causality runs from economic growth to domestic crude oil production. Therefore, conservation policy regarding electricity consumption and gas utilization would harm economic growth in Nigeria while energy conservation policy as regards domestic crude oil consumption would not. Santrauka Tyrinejamas energijos suvartojimo ir ekonominio augimo tarpusavio ryšys bei priežastingumas Ni‐gerijoje, remiantis 1970–2005 m. statistiniais duomenimis. Naujai, lyginant su ankstesniais Nigerijos tyrimais, parenkami energijos vartojimo matavimo būdai (elektros energijos paklausa, vietines naftos žaliavos suvartojimas, duju utilizavimas). Straipsnyje atsižvelgiama i socialine ir monetarine valstybes politika, kurios atspindi valstybes gerove. Pritaikius Johansen tarpusavio priklausomybes metodabuvo gauta, kad tarp visu energijos vartojima atspindinčiu rodikliu ir ekonominio augimo yra netiesioginis priežastinis ryšys. Manoma, kad elektros bei dujunaudojimo apribojimas stabdytu Nigerijos ekonomini augima, o naftos žaliavos vartojimo masto mažinimas nepaveiktu tolesnes šalies pletros.

scholarly journals CO-INTEGRATION AND CAUSALITY RELATIONSHIP BETWEEN ENERGY CONSUMPTION AND ECONOMIC GROWTH: FURTHER EMPIRICAL EVIDENCE FOR NIGERIA

2010 ◽  
Vol 11 (1) ◽  
pp. 97-111 ◽  
Author(s):  
Clement A. U. Ighodaro
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Crude Oil ◽  
Electricity Consumption ◽  
Oil Production ◽  
Conservation Policy ◽  
Oil Consumption ◽  
Gas Utilization ◽  
Crude Oil Production ◽  
Causality Relationship

The Paper re - examined co‐integration and causality relationship between energy consumption and economic growth for Nigeria using data covering the period 1970 to 2005. Unlike previous related study for Nigeria, different proxies of energy consumption (electricity demand, domestic crude oil consumption and gas utilization) were used for the estimation. It also included government activities proxied by health expenditure and monetary policy proxied by broad money supply though; emphasis was on energy consumption. Using the Johansen co‐integration technique, it was found that there existed a long run relationship among the series. It was also found that all the variables used for the study were I(1). Furthermore, unidirectional causality was established between electricity consumption and economic growth, domestic crude oil production and economic growth as well as between gas utilization and economic growth in Nigeria. While causality runs from electricity consumption to economic growth as well as from gas utilization to economic growth, it was found that causality runs from economic growth to domestic crude oil production. Therefore, conservation policy regarding electricity consumption and gas utilization would harm economic growth in Nigeria while energy conservation policy as regards domestic crude oil consumption would not. Santrauka Tyrinejamas energijos suvartojimo ir ekonominio augimo tarpusavio ryšys bei priežastingumas Ni‐gerijoje, remiantis 1970–2005 m. statistiniais duomenimis. Naujai, lyginant su ankstesniais Nigerijos tyrimais, parenkami energijos vartojimo matavimo būdai (elektros energijos paklausa, vietines naftos žaliavos suvartojimas, duju utilizavimas). Straipsnyje atsižvelgiama i socialine ir monetarine valstybes politika, kurios atspindi valstybes gerove. Pritaikius Johansen tarpusavio priklausomybes metodabuvo gauta, kad tarp visu energijos vartojima atspindinčiu rodikliu ir ekonominio augimo yra netiesioginis priežastinis ryšys. Manoma, kad elektros bei dujunaudojimo apribojimas stabdytu Nigerijos ekonomini augima, o naftos žaliavos vartojimo masto mažinimas nepaveiktu tolesnes šalies pletros.

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